A broker lists a property at $340,000. The seller agrees to a 5% commission with 60% going to the buyer's broker. How much would the buyer's broker receive?

Rationale

$10,500

The buyer's broker would receive $10,500 from the transaction, calculated by determining the total commission on the property sale and then applying the agreed-upon split between brokers. The total commission is 5% of $340,000, which is $17,000, and the buyer's broker receives 60% of that amount.

A ($7,000) YOUR ANSWER

This amount represents a misunderstanding of the commission structure. If the buyer's broker were to receive only 40% of the total commission instead of 60%, this would be mathematically incorrect. The calculation here does not reflect the actual split agreed upon in the scenario.

B ($10,500) CORRECT

This is the correct calculation. First, find the total commission by calculating 5% of $340,000, which equals $17,000. Then, taking 60% of that total, we find that the buyer's broker would indeed receive $10,500.

C ($17,000) YOUR ANSWER

This figure represents the total commission for the property sale, not the amount designated for the buyer's broker. The buyer's broker is meant to receive only a portion of this total, specifically 60%, leading to a lower amount than the total commission itself.

D ($17,500) YOUR ANSWER

This option miscalculates the commission total and the broker's share. The total commission of 5% on the property is $17,000, and thus a figure exceeding this total indicates an error in understanding the percentage split and total commission calculation.

Conclusion

In summary, the buyer's broker's compensation is derived from the total commission based on the sale price. By applying the correct percentages to the total commission of $17,000, the broker's share is calculated to be $10,500. Understanding the breakdown of commission structures is crucial in real estate transactions to ensure accurate financial expectations.

A broker lists a property at $340,000. The seller agrees to a 5% commission with 60% going to the buyer's broker. How much would the buyer's broker receive?

$10,500

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